There were several possible catalysts suggested for this spike in concerns about a favorable outcome of the debt ceiling negotiation, which has to be concluded ahead of the Treasury’s X Date, now expected as early as October 1: some cited Steven Mnuchin’s interview on CNBC, in which the Treasury Secretary said that the additional spending needed to help Texas recover from Hurricane Harvey may reduce the amount of time Congress has to increase the federal debt limit; another possibility was month-end liquidity needs and relative positioning across the curve. But the most likely explanation is that earlier today the chairman of the conservative House Freedom Caucus said aid for victims of Hurricane Harvey should not be part of a vehicle to raise the debt ceiling.

Quoted by The Hill, Rep. Mark Meadows (R-N.C.), a Trump ally who leads the conservative caucus, said disaster aid should pass on its own, apart from separate measures the government must pick up in September to raise the nation’s borrowing limit and fund the government.

“The Harvey relief would pass on its own, and to use that as a vehicle to get people to vote for a debt ceiling is not appropriate,” he said an interview with The Washington Post, signaling agreement with what Trump’s approach on the matter has been. It would “send the wrong message” to add $15 to $20 billion of spending while increasing the debt ceiling, Meadows added.

Ironically, as we showed previously, it was precisely the Harvey disaster that prompted Goldman yesterday to lower its odds for a government shutdown from 50% to 33%, on the assumption that it would make conservatives more agreeable to a compromise, when in fact precisely the opposite appears to have happened, and the new dynamic is now playing out in the market where the odds of a government shutdown have never been greater.

Well, late on Thursday the dynamic changed yet again, as Trump now appears to have changed his mind, and instead of seeking a “clean” debt ceiling increase as he did as recently as one week ago, when he adopted the Democratic Party’s (and Steven Mnuchin’s) position and bucking conservatives who traditionally demand new curbs on spending in exchange for authorizing more debt, Bloomberg reported that Trump is now weighing tying the debt limit increase to the initial $5.95 billion request in disaster relief for Hurricane Harvey.

According to Bloomberg, the White House request, which could be unveiled as soon as tomorrow, would include $5.5 billion to FEMA and the remainder to the Small Business Administration. The request is being prepared primarily to cover funding demands through the Sept. 30 end of the federal fiscal year.

Earlier in the day, Texas Republican Senator Weber said Congress will most likely vote on the “first phase” of emergency relief money for Hurricane Harvey in mid-September, which however did not incorporate Trump’s revised plan and/or schedule.

Tying the debt limit increase to a Harvey bill is intended to ease early passage of a debt limit increase and avoid a potential stand-off over what could potentially escalate into a technical default – the outcome that is violently spooking the Bill market – and could rattle financial markets, one of the officials said. According to Bloomberg sources, “the White House would like to extend the debt limit long enough to move back the threat of a U.S. default until after Congress can deal with funding for the full federal fiscal year and tax legislation the Trump administration backs.”

In other words, yet another can kicking, one which would likely push back the debt limit debate to some time in December.

How likely is the success of this latest U-turn by Trump? Bloomberg writes that administration officials have already begun talks with congressional leaders about the new approach. It remains to be seen if Trump will be able to win over enough Democrats to silence what, at least as of this moment, appears to be staunch opposition by the Freedom Caucus which also succeeded in sinking Trump’s first attempt at repealing Obamacare back in March.